Dealer sales, optimism rise - Trade Only Today

Dealer sales, optimism rise

February Pulse Report was up slightly from January and outdid last year’s figure by a hefty 10 points
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Recreational marine dealer sentiment improved in February, and a larger percentage of businesses surveyed in the MRAA/Baird Marine Retailer Pulse Report said they had higher new-boat retail sales than the companies that responded in January.

The MRAA/Baird Marine Retailer Sentiment Index rose from 79 in January to 81 in February, matching its all-time monthly high, and is up 10 points from a reading of 71 in February last year.

The index’s three- to five-year outlook declined modestly — from 82 in January to 79 in February — but was well above its reading of 69 in February of 2016.

The Pulse Reports are designed to provide industry professionals with a regular, timely look into retail trends at the dealership level. They were launched by the Marine Retailers Association of the Americas and Baird Research in December 2013 as the first report of its kind compiled specifically for marine retailers.

Soundings Trade Only joined the partnership with Baird and the MRAA in February and will continue to participate in the distribution of the survey and the reporting of its results in future months.

“The information contained in each Pulse Report simply can’t be found anywhere else, and we strongly believe our print and online audiences will find them extremely useful,” said Trade Only editor-in-chief Bill Sisson. “Joining MRAA and Baird in gathering data and distributing the Pulse Report results each month was an easy choice for us.”

Marine Retailers Association of the Americas president Matt Gruhn was pleased but not surprised to see the sentiment index rise in February.

“The market conditions are strong,” he said. “Boat shows have been doing well. New-boat retail trends are the highest we’ve seen.”

Gruhn said the overall report shows that “we’re starting off the year on the right foot. We’re headed in the right direction.”

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Although the Pulse Reports analyze an array of industry data points, such as new-boat demand, inventory levels, access to credit and other indicators, the sentiment index, a sort of confidence index for retailers, was one of the chief reasons the reports were created.

“Regularly monitoring the economic vitality of retail boating not only plays a key role in how MRAA members plan their year, but identifying key trends allows marine retailers to adjust their long-range plans, as well,” Gruhn said. “Offering the industry access to the Pulse Reports provides an important baseline off which dealerships can make decisions.”

In addition to raw numbers, Baird provides an analyst’s report to accompany each survey. This expert analysis of the most recent data available adds valuable context to detailed analytics and allows the information to be applied with confidence at dealerships.

“Our goal is to make participation in the survey a quick and easy exercise,” said Craig Kennison, senior research analyst and director of research operations at Baird. “We’re interested in gathering data from dealerships of all sizes, and confidentially sharing a few important metrics can have a major benefit for the entire marine industry.”

Seventy-seven dealers were surveyed in February. Baird said the respondents reported healthy demand and solid boat show activity, “with a number reporting their best shows in decades.”

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“We expect wealth creation among affluent consumers and potential tax policy changes to create more discretionary income, fueling continued industry growth in 2017,” Baird said.

Eighty percent of the retailers surveyed reported new-boat sales growth in February, which was up from 60 percent in January and a record-high percentage of dealers reporting positive retail sales trends. Although only about 4 percent of new-boat sales occur in February, “our checks suggest that U.S. demand for powerboats remains very healthy early in the season,” Baird said.

Fifty-eight percent of the dealers reported increases in used-boat sales in February, compared with 39 percent in the January survey.

Surveyed dealers indicated that results at recent boat shows have been slightly below 2016 levels. Sixty-six percent indicated that boat show results were “good” this year, compared with just 16 percent who said they were “bad.”

“A number of retailers also indicated near-record results,” Baird said. “One retailer characterized the 2017 boat show season as ‘best boat show results ever,’ while another indicated that ‘it was the biggest show we’ve had in at least the last 20 years.’ “

Baird said retailers reported that new-boat inventory “improved sequentially and remained well below inventory levels last year.” Thirty-three percent believe inventory is too low, and the same percentage thinks it is too high.

“Net, we consider inventory to be within a ‘normal’ range, though dealer commentary suggests some difficulty obtaining inventory in hot product lines (especially among pontoon brands),” Baird said.

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Used inventory remains lean. Sixty-eight percent of retailers report that inventory is “too low,” compared with 8 percent that consider it “too high.”

“We continue to believe a limited supply of used inventory will eventually lead consumers to consider new-boat purchases,” Baird said.

Access to the monthly Pulse Reports is free for MRAA members; all others can view the report by participating in the survey or visiting rwBaird.com and creating an account.

This article originally appeared in the April 2017 issue.

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